Becoming the president of an international corporation used to take a lifetime of hard work. Now, it can be done with a PC, strong entrepreneurial spirit, and less than 30 days.
The idea of being self-employed seems daunting to many professionals. It’s estimated that 80 percent of businesses fail within the first five years. If you’re a ‘glass is half-full’ kind of person, you might be discouraged by such an estimate. However, the typical entrepreneur views this an invitation.
An entrepreneur isn’t discouraged by 4-to-1 odds. They see a good chance (one in five) that a given venture will succeed. And, they have a sense of certainty that while individual ventures may fail, it should only take them five attempts to find the right venture.
With the help of technology, it’s never been easier, or less expensive, to start an international company. And, even the cost of failure has decreased. Within 30 days, its possible for anyone with a good idea and a modest savings account to start their own business.
Phase 1 : Business Planning
Even though a business plan isn’t required for starting your corporation, its not a bad idea. In fact, it’s a good one. Based on a study by Jessie Hagen of the US Bank, most businesses fail due to a combination of four factors: poor business planning, poor financial planning, poor marketing, and poor management.
If you write a good business plan, there are two likely results:
- You plan ahead.Your anticipate potential marketing, management and financial problems. In doing this, you decrease your likelihood of failure. This means your odds of succeeding have likely broken the one-in-five barrier.
- You opt out.In writing the business plan, you’ve determined that your business idea isn’t profitable. Businesses that fail at the planning stage are the most cost effective. If this is the result, wait for the next idea to hit and begin the process again. Convince yourself that your odds have improved to one-in-four.
According to Hagen’s study, in the Business Planning category, 78% of businesses fail due to lack of a well-developed business plan. Business planning software isn’t required — but its necessary. That is, creating a business plan by yourself is an intimidating task. You’re a fool not to use the tools that are available if you’re developing a business plan for the first time. I’ve had success with two tools, using them in combination with one another:
This software, from Atlas Business Solutions, breaks down business planning is the typical step-by-step process, but includes better tools for financial projections than most. Ultimate Business Planner was chosen by Intuit to be the best business plan software on the market.
This inexpensive web-based business planning tool fills the gaps of most desktop tools. It presents you with easy-to-answer questions that result in some “ready-to-use” text based on common business, financial, marketing, and management strategies. I’d recommend using this tool and pasting results into Ultimate business planner.
Although its possible to generate a business plan very quickly with these tools, I recommend spending a minimum of two weeks for the business planning process. Many of the questions you need to answer to create a meaningful business plan require research, contemplation, and discussion.
Phase 2: Incorporate
With a winning business plan in place, the next step is to form the legal entity for your business. To reduce the potential risks to your personal assets, you’ll likely want to create a corporation or an LLC. Both have their advantages and disadvantages. Corporations, for example, make it easier to raise capital by sell stock.
There are two types of corporations: S Corps and C Corps. Each have their own advantages: Income from an S Corp, for example, can be rolled into your personal taxes. C corps provide better structure for multiple owners. LLCs are more flexible than corporations in most respects. However, structure can be a good thing when it comes to business.
You’ll need to do some basic research because there are many things to consider when forming a legal entity, I suggest using a professional. Lawyers are the most expensive option. Online services that specialize in creating legal entities are typically a better option for entrepreneurs. They are experienced, knowledgeable, and affordable. BizFilings, for example, provides a free guide to incorporation and can help you form any kind of entity in any state.
- Download the free guide to incorporation (pdf)
- Form your business online
Phase 3: Brand and Infrastructure
When it comes to developing your company’s brand (logo), marketing materials, and web site, I’d recommend working with experienced professionals. By making a modest investment up front on professional materials, you’re likely to have a stronger brand, more professional image, and less headaches overall.
Besides, you’ll need to be setting up the infrastructure for your business at the same time. This includes telephone, internet, and print-related elements.
Many entrepreneurs start their first company while they’re still employed. This provides them with cash flow, health insurance, and the confidence they need to make a gradual transition to full-time self employment.